The GOP Has a New Health Plan—and It Sounds Exactly Like the Old One

March 17, 2014

House Republican leaders have come up with a new health care proposal. And based on a report in the Washington Post, it will look a lot like their old health care proposals—the ones that would have done very little to improve access, reduce financial distress, and contain health care spending. But this new plan would be different in one key respect. Implementing this sort of Republican plan now would probably mean taking away coverage from quite a lot of people who just got it. That’s a pretty big deal.

Of course, they don’t admit that. The main feature of the Republican approach, according to the Post’s Robert Costa, will be cross-state purchasing, expansion of high-risk pools, and malpractice reform. The idea, which Republicans have been talking about for 20 years, would mean that somebody in, say, New York could buy a policy from a carrier in, say, North Dakota. Sounds great, right? We order shoes from far-flung websites and drive across the state line for beer—why not do the same for health insurance? Here’s why: A big reason coverage in places like New York has gotten expensive is local rules designed for protect people from insurance companies’ misbehavior. In New York, carriers must sell to anybody, regardless of pre-existing condition, and they must provide a reasonably comprehensive set of benefits.

The Affordable Care Act effectively made those kinds of regulations national. But if the GOP were to get its way, scrapping Obamacare and replacing it with the yet-unpublished plan Costa describes, the insurance industry would likely evolve just like the credit card industry did, with carriers relocating to states with the least regulations. That would be good news for healthy people willing to carry bare-bones coverage, and for people with enough money to pay for a plan, would love this arrangement. But people with preexisting conditions, the ones who were only able to buy coverage thanks to the ACA’s rules, would be back to the bad old days.

Not to worry, Republicans always say—that’s the reason for high-risk pools, which are separate insurance arrangements for people who can’t buy insurance on their own. In theory, high-risk pools may sound like a sensible idea. In practice, they are relatively expensive to run—because, by definition, they don’t have the premiums from healthy people to subsidize the cost of the sick. And they rarely get the money they need from government, because they lack constituencies powerful enough to fight for funding. As a result, high-risk pools almost always end up oversubscribed, leading to long waiting lists. And they typically provide less coverage for more money.

Malpractice reform is a more promising area, in the sense that reforms could yield some real cost savings and at least some Democrats might be interested. (Former Obama Adminstration Administration adviser Ezekiel Emanuel has said the White House was eager to make a deal on malpractice, if only the American Medical Association had made it a priority.) But a lot depends on the kind of malpractice reform. There are versions that simply shield physicians from lawsuits or limit their liability, rather than improving the system so that truly bad providers receive punishment and quality of care improves.

The interesting question is how Republicans intend to present this plan. Right now millions of Americans are getting federal subsidies, sometimes worth thousands of dollars a year, or newly enrolling in Medicaid. If Republicans intend to repeal the Affordable Care Act and replace it with the framework that Costa's story describes—or even something with a bit more money behind it—a lot of those people are going to lose their assistance and, possibly, they are going to lose insurance altogether. Until this year, taking away Obamacare meant taking away a hypothetical benefit. Now that benefit is real. The politics might look worse than House leaders and their allies realize.

But really, the policy details are sort of irrelevant here. Notwithstanding the efforts of a few dedicated intellectuals and a tiny cadre of federal lawmakers, the vast majority of Republican officials have zero interest in health care reforms that significantly increase access to care. The new House Republican plan was supposed to show otherwise. If they actually manage to produce something—this isn’t the first time they’ve promised a proposal wasn’t imminent—and if it looks like the media reports suggest, the plan will merely confirm everybody’s suspicions: Significantly increasing access to health care just isn’t a priority for today’s Republican Party.